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Kobe Steel scandal deepens over quality of products used in cars and aircraft

Toyota is among the carmakers supplied by Kobe Steel. Photograph: Yuya Shino/Reuters

A new bullet train at Tokyo station. The Central Japan Railway Company said some parts from Kobe did not meet industrial standards, but there were no safety issues. Photograph: Hiroyuki Ozawa/Alamy

Japanese company admits it falsified data, with Nissan, Ford, Toyota, Honda, Mazda and Subaru among its clients

Japan’s third-biggest steelmaker, Kobe Steel, is embroiled in a deepening scandal over the quality of products including aluminium and copper used in cars, aircraft, space rockets and defence equipment.

On Wednesday, the company said it had found one case of falsified data on iron ore powder – mainly used in vehicle parts such as gears – that had been shipped to a customer. It follows Kobe’s admission at the weekend that it had falsified figures about the strength and durability of its aluminium and copper products, which are used in the transport and defence industries.

Kobe’s shares plummeted 18% after the iron ore admission, which brought the company’s stock-market losses since the scandal broke to $1.6bn (£1.2bn). It is examining other possible data manipulations going back a decade.

Toyota, one of its customers, described it as a “grave issue”.

Kobe’s customers – the firm said more than 200 were affected – are rushing to check the safety of their products. The company supplies materials to carmakers Ford, Toyota, Honda, Mazda and Subaru as well as aircraft-makers Boeing and Mitsubishi Heavy Industries. Hitachi said trains exported to the UK were affected, but the trains had not started operating yet.

Toyota, Nissan and Honda have all confirmed that they have used aluminium supplied by Kobe in hoods and doors. Toyota said it was “rapidly working to identify if any of our vehicle models may potentially be affected, and via which components.

It added: “At the same time, we are considering what measures need to be put in place going forward to address this matter. Toyota has long requested its suppliers to be thorough in matters related to compliance. We recognise that this breach of compliance principles on the part of a supplier is a grave issue.”

Nissan said: “We have confirmed that aluminium from Kobe Steel is used in the hoods and doors of some of our vehicles. As hoods are related to pedestrian safety, we are working to quickly assess any potential impact on vehicle functionality.”

Kobe has also begun an investigation into Kobelco Research Institute, which tests products for the company, and found 70 cases of tampered data on materials used in optical disks and liquid crystal displays.

“Data in inspection certificates had been improperly rewritten ... and the products were shipped as having met the specifications concerned,” the company said, describing the actions as “improper conduct”.Advertisement

Kobe, one of Japan’s oldest industrial companies, said it was contacting its customers and working to establish whether the products it had supplied were safe. At the moment, it does not believe that safety has been compromised. “Verification and inspection to date have not recognised specific problems casting doubts on the safety of the nonconforming products,” it said.

The company has set up a committee headed by its president, Hiroya Kawasaki, to investigate the quality issues, and hired a law firm to conduct an external investigation of all its businesses, including overseas. It discovered the misconduct during internal inspections and “emergency quality audits”.

Yoshihiko Katsukawa, a senior official at Kobe, told a news conference: “We can’t rule out the possibility that the external investigation will find other cases.” He added that customers had not raised any safety issues or stopped buying the company’s products.

The Central Japan Railway Company said some parts it received from Kobe for its bullet trains did not meet Japanese industrial standards, but there were no safety issues.

Kobe is under pressure from the Japanese government to resolve the crisis quickly. “We ask Kobe Steel to thoroughly look into the causes ... and take steps to prevent a recurrence as well as to make utmost efforts to restore the trust of not only its customers, but of society as a whole,” said the deputy chief cabinet secretary, Kotaro Nogami.“